Why Rates Aren’t Headed Higher in 2013….Debt Limit Reached…Gross Loading up on NY Munis…and more!December 27th, 2012 by David Waring
Business Insider: The size of the mortgage bond market has shrunk much more than the treasury market has grown – Harris believes that the tight supply in the bond market will keep investors buying Treasuries for years.This dynamic should quell some fears that demand for Treasuries will just disappear and send borrowing costs/interest rates surging in the near-term.
US Treasury: Geithner writes Reid. Debt limit will be hit on December 31st. - Dear Mr. Leader: I am writing to inform you that the statutory debt limit will be reached on December 31, 2012, and to notify you that the Treasury Department will shortly begin taking certain extraordinary measures authorized by law to temporarily postpone the date that the United States would otherwise default on its legal obligations…..
Business Insider: Bill Gross is loading up on NY munis - The $285 billion Total Return Fund, which Gross runs at Pacific Investment Management Co., boosted its New York state allocation to about a $3 billion market value in the quarter ending Sept. 30, from $1.4 billion as of June 30, according to a semi annual filing the firm released this month. It was the largest increase by amount among U.S. states.
Learn Bonds: Iconic brands with juicy yields - Ford and Dish Network bonds look good.
WSJ: Junk bonds were the best performers of 2012 - Up 16% year to date.
Detroit Free Press: Detroit city council maneuvers to avoid state takeover - Six members of the city council told the Free Press editorial board that their plan goes beyond what Mayor Dave Bing has proposed n way of layoffs and furloughs in helping fix the city’s fiscal woes and that it is doable should the mayor execute it in time to avoid having Gov. Rick Snyder appoint an emergency manager to take over the financial operation of the city.
WSJ: Corporate bond investors may want to sell US and buy Europe - Europe could be a better bet than the U.S. since European firms are unlikely to take risks with their balance sheets while growth remains so weak. In contrast, U.S. companies are increasingly turning to shareholder-friendly gambits such as issuing bonds to fund share buybacks.
Bloomberg: Sales of mortgage backed bonds soar to 3 year high – Sales of U.S.-backed mortgage bonds soared to a three-year high as steps by the Federal Reserve and Obama administration to make homeownership more affordable propelled a 34 percent jump in refinancing.
DIY Investor: How professional bond traders choose the sectors they invest in - Professional bond traders look not just at maturity and duration but also at spreads. They ask, for example, whether the yield spread on corporate bonds as a sector compensates for the incremental risk.
Gundlach always had a good line that”his job is to invest based on what policy is, not whine about what it ought to be” Opposite=Hussman
— David Schawel (@DavidSchawel) December 27, 2012
Gross: No cause for celebration when #fiscalcliff gets resolved. Higher cap gains, dividend, income taxes ahead. Wealth tax. Reduce risk.
— PIMCO (@PIMCO) December 27, 2012